D&D as a metaphor for start-ups

Put an Internet start-up next to Dungeons & Dragons, and immediately, they both have the nerd thing in common. But the comparison is much more complex, Phil Libin, CEO at Evernote, said during his talk, “Chaotic Good: The Right Alignment for Your Company,” this morning at South by Southwest Interactive.

“Everything I ever needed to know about business, I learned from playing Dungeons & Dragons as a kid,” Libin said.

The real key for start-ups is to choose your alignment early. In D&D, you must decide if your character will be good, evil or neutral, and Libin recommends “chaotic good.”

It translates to an approach to business that is bucks the conventional win-at-all-costs approach. Not pitting users against advertisers. Not looking at competitors as competitors.

“(In D&D) you weren’t playing against anyone,” Libin said. “You didn’t play to win, you played to play.”

At Evernote, they place their competitors in two buckets.

“Every company in the world we are gong to put into two buckets: what can we do together? Or if there’s nothing we can do together, then we just ignore them,” Libin said.

An extension of this is to start with a simple and direct business model. This makes things less complicated, and nullifies the potential for conflicts between users and advertisers. At Evernote, they did away with advertisers. It would give Libin and his team two masters to serve, he said.

Evernote’s model is simple: get people to sign up via word of mouth, get them to stay, and eventually, they’ll pay.

“I learned this psychology from going to Apple stores,” Libin said. “Every time I go to the Apple store, I want to buy something.”

Also, this idea of disruption, making a splash and letting the whole world how good your site is, should not be the goal, just a side-effect of successful entrepreneurship.

“The value that Facebook created was not proportional to the value that it took away from Myspace,” Libin said. “It was a 1,000 times more.”

“If you fell into the fetish of disruption, I think you start making wrong decisions.”

It’s about playing, not winning, necessarily.

“You should refuse to play the zero-sum game,” Libin said. “This is exactly what D&D is not is a zero-sum game.”